State of the Internet

July 2010
Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 2

 The US Is No Longer the Center of the Online Universe

US Internet Population vs. Rest of the World Distribution of Worldwide Internet Audience

Rest of the North

World 34% America
Europe
16.2%
28.0% Latin
86% 8.4% America

7.5% Middle East

US - Africa
66% Asia Pacific
39.9%

14%

1996 2010

 In 1996, 2/3 of the world‟s Internet population was in the US, yet today Asia Pacific is the largest
region.
 Many emerging regions are likely to bypass old modes, skipping dial-up to go straight to broadband,
making multimedia, video, and collaborative content immediately accessible.
 Early adoption of mobile web in addition to PC web will likely be popular in many of these high-
growth areas.

© comScore, Inc. Proprietary and Confidential. 3 Source: comScore World Metrix, July 2010
China Surges Past the US

Internet Users Age 15+ (MM)

China 271.6
United States 182.0
Japan 72.6
Germany 49.1
Russia 43.3
France 41.3
India 39.6
While US user growth was 9% over
United Kingdom 38.3
the past year, Russia, China, Mexico
Brazil 37.0 and Brazil have experienced
South Korea 30.0 impressive growth rates of 31%, 29%,
Canada 23.0 21% and 19%, respectively.
Turkey 22.2
Italy 22.0
Spain 20.8
Mexico 16.5

© comScore, Inc. Proprietary and Confidential. 4 Source: comScore World Metrix, July 2010
More Worldwide Unique Visitors Are Spending More Minutes on
Social Networking Sites than Email Sites

Global Total Unique Visitors (000)

+23%
1,000,000
Unique Visitors (000)

800,000
+8%
600,000
Social Networking Users
400,000 Surpassed Email in
August 2009
200,000

0
Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10

Email Social Networking

300,000
Global Total Minutes (MM) +46%
Minutes (MM)

250,000
200,000
150,000
100,000
+5%
50,000
0
Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10

Email Social Networking

© comScore, Inc. Proprietary and Confidential. 5 Source: comScore World Metrix, July 2010
Social Networking Sites Reach a Higher Percentage of Women than
Men Worldwide

 Older women are increasingly taking to social networking more than their male
counterparts.
 Users 15-24 have the highest reach and heaviest usage.
– The 45+ female segment is the highest growth driver for Social Networking sites.

Social Networking Social Networking

%Reach by Age & Gender Time Spent (Minutes per Visitor)
85.0 450.0
80.0 400.0
75.0 350.0
70.0 300.0
65.0 250.0
Males Males
60.0 200.0
Females Females
55.0 150.0
50.0 100.0
45.0 50.0
40.0 0.0
15-24 25-34 35-44 45-54 55+ 15-24 25-34 35-44 45-54 55+

Worldwide Audience (15+ accessing from Work or Home), July 2010

Source: Media Metrix Worldwide

Source: comScore “Women on the Web: How Women are Shaping the Internet ,”
© comScore, Inc. Proprietary and Confidential. 6
White Paper, 2010
 Global Search Market Growth of 17 Percent Y/Y–More Than 2.9 Million
Searches per Minute

30,000 +18% Top 10 Countries by Number of Searches (MM) Conducted*  Google sites
25,000 Jul-09 account for
20,000 Jul-10 nearly two-
+32%
thirds of the
15,000 +25% 132.8 billion
10,000 +15% searches
+2% +11% +34% +70%
+38% -3% conducted
5,000
worldwide in
0
United China Japan United France Germany Brazil Korea Russian Canada
July.
States Kingdom Federation
 Microsoft
Sites continue
90,000 +8%
to see the
75,000 Top 10 Search Properties by Searches (MM) Conducted Jul-09
greatest gains
among the top
60,000 Jul-10
five search
45,000 properties,
growing 33%
30,000
to 4.4 billion
+22% +29%
15,000 +33% +17% searches, on
+288% +83% +41% +24% +100%
-
the strength of
Google Sites Yahoo! Sites Baidu.com Microsoft Facebook Yandex NHN eBay Conduit.com** Ask Network its successful
Inc. Sites Corporation
*Searches based on “expanded search” definition, which includes searches at the top properties where search activity is observed, not only introduction
the core search engines.
**Conduit.com did not have any search activity in July 2009. The first month of activity in qSearch was December 2009. of Bing.
© comScore, Inc. Proprietary and Confidential. 7 Source: comScore Press Release July 2010: comScore qSearch
Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 8

 A Snapshot of US Internet Activity

In July 2010:
 213.6 million Americans used the Internet.
– Average user was online 24 days in the month, for a total of 32.6 hours, and
viewed 2,779 pages
 85% of Internet visitors viewed an online video in the US, for an average of
14.6 hours each.
 92% of Internet visitors conducted at least one search.
– Average searcher conducted 118 searches
 Total online spending in July 2010 at US sites was $18.5 billion, up 9%
since July 2009. Travel accounted for $8.2 billion, or 44% of total online
spending in July.

Source: comScore Media Metrix, July 2010

comScore qSearch, July 2010
© comScore, Inc. Proprietary and Confidential. 9 e-Commerce Reports, July 2010
Is the US Internet Really Still Growing?

Total US Internet Users

250,000
200,000
+9% Yes, the US
150,000 +34%
Internet is still
100,000 growing, albeit
50,000 not as quickly as
0 it once was.

Total Unique Visitors (000) Average Daily Visitors (000)

The large growth
in Average Daily
Total US Internet Engagement
Visitors as well
2,500
as the increase
2,000 +7% in Average Visits
1,500
per Visitors
1,000 demonstrates
500 the continued
+16%
0 importance of
the internet in
daily life.
Average Minutes per Visitor Average Visits per Visitor

© comScore, Inc. Proprietary and Confidential. 10 Source: comScore Media Metrix, July 2010
What Online Categories are Driving Web Usage?

The 32+ hours the average user spends online is divided among several key content
categories such as e-mail, Entertainment and Social Networking.

Top Categories Reach Top Categories Engagement

+6pt. +15pt.
100% +19pt. Y/Y % point Y/Y % change
+26pt.

Average Minutes/UV
change -15%
400
95% +3%
+9%
300 -3% +4%
Reach

+20pt. -5%
+1pt.
90%
200
85% 100
80% 0

© comScore, Inc. Proprietary and Confidential. 11 Source: comScore Media Metrix, July 2010
 Which Categories are Driving Web Growth?

 Humor ranked
+49%
as the top-
180,000
gaining
160,000 category over
+55%
last year,
+51%
140,000 growing 87% to
+56%
51.8 MM Unique
120,000 Visitors,
UVs (000)

100,000 +61% indicating that

+65% +52%
more Americans
80,000 turned to the
+48%
+87% +79% +65% Internet for
60,000 +79% humorous
content.
40,000 +77%
20,000 +67%  The highly
visited
0 Community
category
garnered a
significant
number of
Unique Visitors,
growing by 49%
Jul 2009 UVs (000) Jul 2010 UVs (000) since July 2009.
© comScore, Inc. Proprietary and Confidential. 12 Source: comScore Media Metrix, July 2010
 What Properties are Driving Web Growth?
40,000
 Blogging sites
+95%
+151% including
35,000
Federated
Media
30,000 Publishing,
+961%
Gawker Media,
25,000 +173% and Technorati
UVs (000)

+182%
Media continue
+141% to show rapid
20,000 +157%
+183% +127% +95% growth.
+124% +107%
+264%
+138%
15,000  The
Entertainment
10,000 site Warner
Music had a
major gain in
5,000
unique visitors
since July 2009
0 fueled by
Warner Music
@ Youtube,
therefore
dominating
other sites in
Jul-09 Jul-2010 year over year
© comScore, Inc. Proprietary and Confidential. 13 Source: comScore Media Metrix, July 2010 growth.
The recession is evident online as a spike in early 2009 mirrored the
growing unemployment rate in the US
The Job Search category increased in total unique visitors by 98% from December
2007 – when the recession began – to July 2010.

Despite the report from the National Bureau of Economic Research* stating the
recession formally ended in June 2009, the unemployment rate is still high and
correspondingly, total minutes spent on Job Search sites jumped 233% and the
number of Job Searches increased 290% in the same time period.
30,000 500
+233%
450
25,000
400
Total Unique Visitors (000)

350

Total Minutes (MM)

20,000
+98% 300

15,000 250
Total Unique Visitors (000)
Total Minutes (MM) 200
10,000
150

100
5,000
50

- -
Jul-2007 Oct-2007 Jan-2008 Apr-2008 Jul-2008 Oct-2008 Jan-2009 Apr-2009 Jul-2009 Oct-2009 Jan-2010 Apr-2010 Jul-2010

Source: comScore Mediia Metrix, comScore Marketer

© comScore, Inc. Proprietary and Confidential. 14
*Source: http://www.nber.org/cycles/sept2010.html, National Bureau of Economic
Research
Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 15

Online Video Viewing Is Growing Strongly with Significant Growth
Potential

July 2010

US Video Viewers 181MM Value Drivers of Online Video

Advertising
% Of Internet Users Who Viewed
85%
At Least One Video
 Reach of elusive audiences
% of Video Viewers Who Viewed
At Least One Ad Video
73%  Better engagement

Total # of Viewed Videos 36.5B  However, monetization is still a big

challenge:
YoY Growth in Video Views 71%  User experience
 Rights for UGC (User
Videos per Viewer 201 Generated Content)

Viewing Time per Viewer 14 hr, 35 min

© comScore, Inc. Proprietary and Confidential. 16 Source: comScore Video Metrix, July 2010
Males Are More Engaged Online Video Viewers than Females

Video Activity By Gender

Females Males 1,199.1

1,200

1,100

1,000

900

800

700

600 545.3
500

400

300 250.5
200 151.2
90.0 91.4
100 +120%
+66%
0
UVs (MM) Videos per Viewer Minutes per Viewer

© comScore, Inc. Proprietary and Confidential. 17 Source: comScore Video Metrix, July 2010
 Time Spent Streaming Jumps as Long-Form Content Floods the Web

Total US Streaming Minutes and Video Views

 Sites heavy with
180,000 +100% long-form content
150,000
have burst onto
the scene over
120,000 the past year.
90,000

60,000
 Specifically, Hulu
+71%
is now the
30,000 thirteenth most
0 popular video
property.

 This new content

Total Minutes (MM) Videos (MM)
type has
contributed to the
July 2009 July 2010
time spent
Hours per Viewer 8.3 14.6 streaming
doubling over the
Videos per Viewer 134.9 201.2
past year.
Minutes per Video 3.7 4.3
© comScore, Inc. Proprietary and Confidential. 18 Source: comScore Video Metrix, July 2010
Where Are People Watching Videos Online?

UVs (MM)

160
144 143 Total UVs (MM)
Google continues to
140 dominate in terms
Content UV's (MM) of audience size,
120
100 fueled by YouTube‟s
80 143.8MM UVs.
59 55 57
60 48 46 47 47 99.7% of Google video
45 44 42 41 40 40
40 25
31 viewers are
20 watching content,
0 0 0
0 dwarfing the
percentage of
viewers watching
their ads (33%)

© comScore, Inc. Proprietary and Confidential. 19

Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 20

qSearch 2.0: Trends in the Search Market, cont‟d

Search growth drove the increasing base of unique searchers (215MM in July
2010); search intensity also increased by 11% versus July 2009.
The increased search intensity is also evidenced in a 7.8% increase in Searches per Usage Day to
9.3 in July 2010.

Total U.S. Unique Searchers (Millions) vs. Search Intensity Change vs.
July-09

118.1
400.0 114.4 120.0
107.4 108.0 109.0 108.7 110.8
106.4 106.8 105.8 106.6 107.2 +11%
103.1
350.0
100.0
300.0 Searches Per Searcher
80.0
250.0 214.4 216.0 219.0 217.7 220.4 217.9 215.1
202.5 204.1 201.6 206.7 207.9 211.7
200.0 60.0
+6%
150.0
40.0
100.0 Unique Searchers
20.0
50.0

- -
Jul-09 Oct-09 Jan-10 Apr-10 Jul-10

© comScore, Inc. Proprietary and Confidential. 21

Source: comScore qSearch 2.0
qSearch 2.0: Leading Search Properties

Microsoft, Yahoo!, and Google show intensity growth versus a year ago, which
further contributed to their search increase. Microsoft’s search property, Bing,
shows the greatest increase in intensity at 55% growth since July 2009.
Leading Search Properties: Searches per Searcher
Change vs.
July-09

80 77.7
+6% Google Sites
70

60

50
+11% Yahoo! Sites
40

30 26.7 +55% Microsoft Sites

23.8
20
-2% AOL LLC
10 9.2
8.4 -2% Ask Network
0

Jul-09 Oct-09 Jan-10 Apr-10 Jul-10

© comScore, Inc. Proprietary and Confidential. 22

Source: comScore qSearch 2.0
 Although Search Engines Are Still the Major Players, Search Isn‟t
Confined to the Engines Anymore
Site search (non-search engine search) is showing double the year over year growth
than search engines, but still represents a smaller percentage of overall searches.

Share of Search Growth by Search

Searches (Billions)
Engines and Non-Search Engines

Total Change vs.

Non-Search Engines July-09
Search Engines
15.2 Billion
+18%
25.4
21.6 54% 46%
+26%
10.2
8.1 10.2 Billion
+13%
13.5 15.2

Search Engines
July 2009 July 2010
Non-Search Engines

© comScore, Inc. Proprietary and Confidential. 23 Source: comScore qSearch 2.0; “Search Engines” defined as properties falling
under the Search/Navigation category in qSearch
Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 24

 40.7% of Mobile Phone Owners Browse the Mobile Internet, Use
Applications or Download Content (Mobile Media Users)

 The number of people who are just using voice has declined 15.0% year over year.
 In July of 2010, approximately 70% of mobile phone owners used their phones for more than just making
calls.

Mobile Market Segments - July Mobile Market Segments - July

2009 2010

Just Voice,
Just Voice, Mobile Media, 29.6%
35.0% 34.1% Mobile Media,
40.7%

SMS (and not

Mobile Media), SMS (and not
31.0% Mobile Media),
29.7%

Product: MobiLens
Mobile Media = Connected Media (except SMS) in MobiLens
Data: Three month average ending July 2010
© comScore, Inc. Proprietary and Confidential. 25 Country: US – N=32,009
The Demographics for Mobile Internet Browsers by OEM vary

 Advertisements targeted at RIM (Blackberry) devices will gain an older, more male demographic.
 LG, Android and Samsung device owners are younger and have an even gender split.

70% Demographic Profile of Mobile Internet Browsers by OEM

60%
Samsung

LG Motorola
50%
% Female

Nokia
RIM
40%
Android
Apple

30% Size of bubbles = % of the

market
Higher on chart = More female

20%
29.0 30.0 31.0 32.0 33.0 34.0 35.0 36.0 37.0
Median Age

Product: MobiLens
Data: Three month average ending July 2010
© comScore, Inc. Proprietary and Confidential. 26 Country: US – N=32,035
Mobile Browsing Genres

 The mobile Internet is as much about connecting with friends and family as it is about
viewing news and info.
 47.5% of Mobile Browsers search, compared to 89% of PC Internet browsers.

Top Genres for Mobile Browsing

General Reference 17.6%
Movie Information 20.2%
News and Weather Genres
Stock Quotes or Financial News 20.6%
Communicating and Sharing
Tech News 21.0%
Other
Maps 21.8%
Photo or Video Sharing Service 23.1%
Work Email 23.9%
Entertainment News 28.0%
Sports Information 28.6%
IM 30.0%
News 36.0%
Weather 36.9%
Social Networking 42.0%
Personal Email 45.9%
Search 47.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

% Used Browser Product: MobiLens

Data: Three month average ending July 2010
© comScore, Inc. Proprietary and Confidential. 27 Country: US – N=32,035
Mobile Advertising Best Suited for Brands with Targets under 44

 Brands Can Choose a Number of Methods to Start a Dialogue with Consumers Using the Mobile Device.
– 66% of mobile owners use SMS; marketers can use 5-6 digit short codes on ads requesting
consumers to send an SMS
– 34% of the market browse the mobile Internet.
– 31% use an app (other than a pre-loaded game).

 With over 50% of males between 18-44 using the mobile browser, mobile banner advertisements are an
ideal way to engage with this audience.

% of Mobile Media Users by Age and Gender

Male Female
3% 3%
6%
9% 11%
13-17 8% 13-17
18-24 18-24
15%
19% 14%
25-34 19% 25-34
35-44 35-44
45-54 45-54
22% 55-64 19% 55-64
27% 65+ 65+
25%

Mobile Media = Connected Media (except SMS) in MobiLens

Product: MobiLens
Data: Three month average ending July 2010
© comScore, Inc. Proprietary and Confidential. 28
Country: US – N=32,035
Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 29

Total e-commerce sales through Q2 2010 were up 7% versus year ago.

Following a soft 2009, Travel and Non-Travel spending are up 5% and 9%

respectively versus year ago.

e-Commerce Dollar Sales Growth ($ Billions)

Source: comScore e-Commerce Measurement

+7% +7%
+17% -2%

+19% $214 $209

+22%
$200
+26%
$171
+9%
$84 $80 -5%
+29% $143 $77 +12%

$117 $69 +13%

$111
$93 $61 +20%

$72 $51 +28% $44 +5%

+6%
Travel $40 +33% 0%
$30 +24% $123 +20% $130 $130
+24% $102
Non-
+26% $67 +26% $82 $67 +9%
Travel
$42 $53

2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD

© comScore, Inc. Proprietary and Confidential. 30

Visitation to the overall retail category grew 15% Y/Y
Total Unique Visitors (MM) and % Growth vs. YA
on Selected Retail Sites in July 2010
Source: comScore Media Metrix

Amazon Sites 77.9 +17% Ticketmaster 14.5 +16%

ValueClick
Wal-Mart 37.2 +12% Sites
14.2 +23%
Apple.com Worldwide The Home
Sites
37.0 -1% Depot, Inc.
12.5 +8%
JCPenney
Target Corporation 28.5 +1% Sites
12.4 +10%

NETFLIX.COM 21.7 +47% Pronto Sites 12.4 +18%

Google Product
Search
19.7 +121% SEARS.COM 12.2 +15%

Yahoo! Shopping 18.8 -18% PriceGrabber 12.0 +103%

Best Buy Sites 18.0 +7% 10.7 -25%

Shopping.com…

Hewlett Packard 16.7 +14% Dell 10.4 -15%

Shopzilla.com Sites 15.3 -21% Macy's Inc. 10.1 23%

© comScore, Inc. Proprietary and Confidential. 31

 Coupon sites continue to grow in importance; category visitors tend
to skew female

Total Unique Visitors (000) and Total Visits (000) to Coupon Sites
Source: comScore Media Metrix 101.1 million visits
120,000 +56% vs. Jul „08
100,000

80,000

60,000 34.5 million UVs

+34% vs. Jul „08
40,000

20,000

0
Jul-2008 Sep-2008 Nov-2008 Jan-2009 Mar-2009 May-2009 Jul-2009 Sep-2009 Nov-2009 Jan-2010 Mar-2010 May-2010 Jul-2010

Total Unique Visitors (000) Total Visits (000)

UV Composition Index by Income UV Composition Index by Gender

Under 97
$60K
Females 114
$60K - 101
$74,999

$75K - 104
$99,999
Males 86
$100K 104
or more

© comScore, Inc. Proprietary and Confidential. 32

Flash Sale sites continue to gain traction with high growth rates Y/Y

U.S. Unique Visitors to Flash Sale Sites

Source: comScore Media Metrix

2000

1800

1600

1400

1200
HauteLook
1000 +12% vs. July „09

800 Ideeli
+382% vs. July „09
600 Gilt
+46% vs. July „09
400
RueLaLa
200 +15% vs. July „09
0

HAUTELOOK.COM IDEELI.COM GILT.COM RUELALA.COM

© comScore, Inc. Proprietary and Confidential. 33

Agenda

 Worldwide Context
 US Vital Signs
 State of the Internet
– Video
– Search
– Mobile
– eCommerce
 Monetization

© comScore, Inc. Proprietary and Confidential. 34

 In 2009 and continuing into 2010, decreasing ad dollars shifted away from
Email, Lead Generation, and Classifieds towards Search, Display Ads,
and Online Video
Internet Advertising Revenues
Internet Advertising Revenues ($ Billions)
by Ad Format
E-mail
$5.4 B $6.2 B
1% 1%
5% Leads/
+10% 7%
-3% Referrals
+26% 23.4 10%
22.7 10% Classifieds
21.2 2% Sponsorships
+35% 2%
5%
4%
Video
16.9 6%
+30% 7% Rich Media
?
+32% 12.5
12.1
+76% -12% +22%
9.6 23% Display/
-15% 22%
8.1 Banner Ads
7.1 7.3
6.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q1 &
2: 2010

47% 47% Search

Applying historical seasonal data, Q1 and Q2‟s 2010
revenues of $12.1 billion look to make 2010 the highest
annual year, exceeding 2008 as the previous highest
annual total.
Q2 2009 Q2 2010
© comScore, Inc. Proprietary and Confidential. 35 Source: IAB Internet Advertising Revenue First Half-Year Results Report 2010
Who are the top advertisers in the online market in July?

9,000,000
Top 10 Advertisers
Total Display Ad Views (000)

8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0

Top advertisers include financial services such as Experian, Scottrade, and Progressive Corporation
(Progressive.com) along with telecom companies, AT&T and Verizon. The education company Apollo
Group, Inc. (Universityofphoenix.com) ranks within the top 10, most likely targeting applicants for the
coming school year.
© comScore, Inc. Proprietary and Confidential. 36 Source: comScore Ad Metrix, July 2010
Thank You!

Elise Neel
VP, Marketing Solutions
eneel@comscore.com

For More Information:

Email: learnmore@comscore.com
Twitter: @comScore
Deck & Audio posted at comScore.com

© comScore, Inc. Proprietary and Confidential. 37